One of the more interesting aspects of being a tax accountant is the fact that how we feel about our taxes has everything to do with how much money we actually have. Most of the time, I can tell how a person will react to a return, based on their net worth.
Please allow me to explain.
Lower income individuals are all about the refund. They actually have the ridiculous idea that how we perform as accountants has everything to do with how much money they get back.
They’ll actually say something like, “My last guy got me a refund of $3,000. Why am I only getting back $2,500? You must have made a mistake.”
Every tax law in the book might have changed between those two years explaining the difference, but to them it’s only about two things. How much is my refund and when can I expect it? The realities of tax law somehow seem irrelevant.
Middle income individuals are entirely different. They generally have to pay tax and hate every minute of it, which I understand. There’s plenty we do to help these people, but their approach is different.
Many times, if they’re getting a large refund, it’s because they messed up their withholding. It’s an odd phenomenon. If they get a large refund, many will think it’s because someone made a mistake.
The fact that their company’s income took a nose dive doesn’t seem to matter. The opposite is also true.
High net worth individuals are completely different. They seperate their money into three categories.
First is the tax they pay, second is the money they spent during the year, and third is the amount they were able to save. As long as they are able to save more money than they spend in taxes, they’re happy.
In many ways, this is the secret to their wealth. They want to make more money so they can save more and control their taxes.
In other words, they look at it backwards.
I never saved any real money until I changed my perspective. When I’m doing your returns, please remember this message. Think before you react.
Let me leave you with this.
A new study reported in the Wall Street Journal is saying that many of us are hitting new depths when it comes to our feelings about the pandemic.
24% of Americans have reported they are “not too happy”, which is an 11% rise since 2018. Those reporting that they were “very happy” has dropped to 19% from 31% over the same period.
Our feelings as the pandemic has continued have changed. Initially there was intense fear and anger. This has given way to a sense of almost giving up.
I get it. We’re in our third year of this mess, with no end in sight. Every time we think it’s going to end, a new variant rears its ugly head.
But nothing lasts forever. This too shall pass.
Many are hurting, tired, and beaten down, but now isn’t the time to run a bedsheet up the flagpole. We’re Americans. We don’t give up.
Spend some time this weekend recharging your batteries. Take some time for yourself. Do something that you enjoy. Feed your soul. Find your center.
Also please spend some time with your family and loved ones. Let them know how much you care. They’re probably hurting as well. Be that steady hand at the wheel they need to be reassured in the storm.
But do so knowing that we’re right there with you. If you need to talk, please call.
We’re all going to get through this. Let’s get through it together.
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